At a Glance

About one in eight Americans who have medical debt owe $10,000 or more, but the average is around $2,400 (according to the Census Bureau). The financial and emotional impact medical debt can have can be significant.

For example, the fear of falling into medical debt can sometimes prevent people from seeking medical care they need. Or, with several myths out there surrounding medical debt, some consumers are blindsided when their bills are sent to collections.

Be armed with the most accurate information about medical debt by knowing these myths and facts.

In this article, you’ll learn:

Popular medical debt myths and facts

Do you know the myths and facts around medical debt? Read on to learn some of the common thoughts about medical debt and whether it’s accurate or not, as well as tips for avoiding problems with debt.

1. Once you make payments on medical bills, they can’t be sent to collections


Even if you pay your medical bills, it doesn’t necessarily mean they won’t be sent to collections. This is because regular payments need to reach a certain amount before they can exclude you from being turned over.

Late payments and having an unpaid balance can also make you eligible for collections, even if you’re on a payment plan but are late by just a few days.

Some states have additional consumer protections, but these can vary. Avoid being sent to collections by making and sticking to payment plan arrangements with the provider’s office or hospital.

2. You will be given a notice before medical bills go to collections


Your provider does not have to tell you before it sends your debt to a collector, but they usually do because they will first try to collect the debt from you. Then, when a debt is sent to a collection agency, the agency will usually notify the debtor by phone or in writing.

However, this doesn’t always happen. Creditors are not required to tell you they are sending your debt to collections, so they may not. Or there could be an error, such as the notice being sent to the wrong address, the bill is lost in the mail, or general billing errors affecting how much you’re charged.

Sometimes, the first time someone hears about their debt is from the collection agency.

To ensure you’re up to date on what you owe, regularly verify your billings and don’t be afraid to ask questions. If you see a doctor or have a procedure at a hospital, ensure you receive a paper or electronic bill for services. You may be able to check MyChart or another patient portal to view or even pay bills. If you don’t receive anything, contact your provider.

3. Medical bills are always correct


Many patients assume that billing departments for their providers will accurately and appropriately calculate their medical bill, but sometimes, mistakes are made.

Errors could include duplicate charges, charges for services you did not receive, an incorrect code for a service that charges a higher amount or a mix up with the insurance company, incorrect balance billing, and a variety of others. Most of the time these mistakes are unintentional, but it can still lead to you being charged more (or less) than you owe.

When you get a medical bill, check it against your insurance company’s Explanation of Benefits (EOB). This document outlines your medical benefits and what you owe for each and can help you understand how your bills are paid and spot mistakes or issues.

If you do spot an issue, reach out to your insurance company and/or provider.

4. Medical debt will not affect your credit


Medical facilities do not report medical debt to the credit bureaus, so even if you have outstanding medical debt, your score will not be impacted.

However, if your debt is sent to a collection agency, your score can take a significant negative hit – sometimes by up to 100 points or more.

Learn more: Can Medical Bills Affect Credit Score?

5. Medical collections are treated differently from other collection accounts


If your debt is sent to collections, you have 180 days to make payments or payment arrangements with your provider before the collection agency can report the debt to the credit bureaus. This gives you some time to pay off the debt and try to protect your score. Then, once the debt is paid, the credit bureaus must remove the medical debt from your credit report. However, the collections listing may remain and affect your score.

If you don’t pay it off, it will remain on your credit report for up to seven years.

6. Paying off medical debt will drastically improve your credit score


Because medical debt isn’t reported to the credit bureaus (until it’s sent to collections), paying it off won’t impact your score at all.

Even if your debt does go to collections and you pay it off, it can still reflect negatively on your credit history for a couple of years. Unless the collections agency agrees not to report your medical account if you pay it off right away, it’s going to remain on your report and impact your score.

Tips to pay off medical debt

If you do find yourself in medical debt, there are several things you can do to help relieve the financial burden:

1. Set up a payment plan with your provider

Many hospitals and providers offer payment plans for patients who can’t afford to completely pay off their medical bills. They may let you make smaller payments over weeks or months instead of requiring the full balance at one time, often with little or no interest. Call and ask your provider if they offer this type of assistance. Just be sure to get any repayment agreement in writing.

2. Consider medical debt consolidation loans

A medical loan for healthcare expenses can help you consolidate medical bills or pay for emergency (or planned) procedures. Consider other options first, such as negotiating your balance, because you’ll owe interest and often fees with a loan. Additionally, it can hurt your credit score.

That said, it can be relatively easy to get a medical debt consolidation loan and loan amounts can range from $1,000 to $100,000. If you have good to excellent credit, you may be able to get a lower interest rate.

Learn more: Medical Debt Consolidation

3. Apply for a medical credit card

Medical credit cards, which can be available online and through some doctors’ offices, commonly offer 0% introductory APR financing for up to 24 months. This means that you can carry a balance for that period without being charged interest.

These credit cards can only be used for medical expenses, and not all providers accept them. Before applying for one of these cards, make sure your provider will accept payment this way. You can also search for a traditional credit card which may be more widely accepted. Many cards have an intro APR period that you can take advantage of to pay off your medical bills over time.

If you choose to pay your bills with a medical credit card, make sure you pay off the balance before the introductory APR period expires. Otherwise, you may face high-interest charges. Also note that applying for a credit card can have an impact on your credit score, especially if you miss payments.

Compare: Best Credit Cards for Medical Expenses

4. Review your medical bills and hire an advocate

Gather all of your medical bills and insurance explanations of benefits (EOB) and review them for:

  • Duplicate billing
  • Unauthorized charges
  • Errors

Make sure everything you’re being charged is the amount you should be charged and all services you received. Also, make sure your insurance company has paid the proper amount. If you have questions, you can call your insurance company or provider.

If you need help, consider hiring a medical bill advocate. They can help you understand your medical bills, file appeals with your insurance company if necessary, and negotiate with your provider to lower your debt and/or create a payment plan. This may not be the most practical if your bills are small, but for larger bills, the cost of hiring an advocate may be outweighed by the assistance they can provide.

5. Check whether you qualify for an income-driven hardship plan

Some hospitals and providers will make accommodations for patients with low incomes and high levels of medical debt. If available, the provider may forgive a portion of your debt and divide the remaining balance into smaller, more manageable payments. This way you won’t have to pay off as much debt as you initially had and you can repay it over time.

6. Try negotiating on your own

Contact the hospital or provider and ask them if they will adjust your bill to lower rates. Sometimes providers will bill you at maximum rates, especially if you don’t have insurance, and they may have flexibility to lower your costs if you can’t afford them. Ask if they can adjust the rates to what an insurance company or Medicare would pay.

Medical debt statistics in the U.S.

Medical debt is a problem in the U.S.

Nearly one in five households (100 million Americans) has reported having some form of overdue medical debt. Patients and their families are contacted by debt collectors about medical bills more than any type of debt. A recent Federal Reserve report found that 37% of adults would not be able to afford a $400 emergency.

It’s estimated that total medical debt in the U.S. may be as high as $195 billion. Of this medical debt, it’s estimated that about $88 billion is in collections.

This high amount is attributed to historically low rates of uninsured patients and rising out-of-pocket costs. For example, the average family deductible is nearly $4,000, an increase from the average of $2,500 10 years ago. Plus, with the increasing costs of healthcare, medical debt can pile up quickly.

According to a recent report, more than ⅔ of people in debt to hospitals, which is where the vast majority of debt is owed, owe more than $1,000, and ¼ owe at least $5,000. Roughly ⅔ of those who owe money to non-hospital providers owe less than $1,000.

Shopping around for more affordable options, using in-network providers, and having an emergency fund for unexpected medical costs can help prevent you from taking on medical debt. If you do find yourself in a situation where you have medical bills you can’t pay, talk to your provider about payment plans or other options available to you.


First, try to negotiate for a lower bill amount. This seems outlandish, but research shows that those who attempt to negotiate a medical bill almost always succeed in getting the bill reduced or dropped. You can also ask about a payment plan to repay the debt over a longer period. Prioritize your debt payments but be aware of the impact medical debt will have on your credit if sent to collections.

A good debt-to-income ratio is 36% or less. Thankfully, medical debts are not included in your DTI calculation unless they go to collections. Once in collections, they will affect your DTI just as any other type of debt would.

If medical debt is sent to collections, it can remain on your credit report for up to seven years.

If in collections, unpaid medical debt over $500 can appear on your credit report and negatively impact your credit score for up to seven years. That said, if you or your insurance company pays it off, the account will be removed from your credit report which can have an immediate positive impact.

Ultimately, it’s better to pay off your medical debt if you can vs. settling. Not only is this better for your credit report and score, it can help you avoid a lawsuit. However, if you can’t afford to pay off your medical debt and you don’t have other options (such as negotiating with your provider, setting up a payment plan, or getting a medical debt loan or credit card), debt settlement can be an option.

Recent surveys suggest that patients in the U.S. owe at least $195 billion in medical debt. At least 6% of adults owe more than $1,000, and 1% owe $10,000 or more in medical bills.